Local Property Tax in France

Two types of local taxes in France:

Land tax (Taxe Foncière)

A land tax payable by the owner of the property. This is payable even if there are no buildings on the land, this tax is still due the only circumstance when this is not payable is if the land is being used for agricultural purposes. This tax is payable by the owner. When purchasing property in France the land tax will be divided pro rata between the vendor and the purchaser.

Occupancy Tax (Taxe d’habitation)

This is the annual residence tax, and is applicable to the occupier of the property in which they were resident on 1st January each year. The tax is payable by the occupier, so if you let your house out on a lease they are liable. However if the occupier does not pay the tax the owner will be liable.

The taxes are collected by central government tax authority but are distributed to regions and local communes, they cover schools, street cleaning, rubbish collection, community facilities and administration of these services. The rate payable is calculated by the collectivité territoriale, the local authorities of the région, département and commune who receive the payments from central government.

When you are you looking for property in France it is worth remembering that taxes can vary quite considerably from region to region quite substantially. Also worth noting is that sometimes the rubbish collection (ordures) may not be included and may be issued as a separate bill. In some areas of France refuse collection can be up to three times a week, another expense to be considered. When looking at your budget and living expenses this is something that should be looked in to.

If you carry out any major work on the property you are required to advise the tax authority and a revaluation of the property will be carried out.

General

The taxe foncière is by far the more expensive and can be up to twice the amount of the taxe d’habitation.

The taxes are payable even if it is a permanent residence or holiday home or if you are resident or not. The definition of ‘occupation’ is based on whether the property is ‘capable’ of occupation. For example if you can prove there is no furniture in the property this would prevent it from being habitable.

For both taxes the important point of reference is the 1st January each year. The tax period is a calendar year and the bills are usually issued in September/October for that year.

New build on certain French property developments can be exempt from taxe foncière for two years, if the property is exempt it is applicable from the date when works were completed. Work is considered completed when the building can be used for its intended use even if there is still some work to be done. When the property is purchased and the building work is finished the local Mairie must be informed. Three copies must be sent to the Mairie by recorded delivery. The declaration will form part of the file that contains the building permit you would have received on purchase.

Another exemption is people over 75 and those with disability pensions and discounts may be available for people over 65 on low incomes.

As with all tax issues it is always worth seeking independent expert advice.